NERC's 10-Year Grid Assessment: Enough Power, And Some Challenges

The latest edition of the North American Electric Reliability Corporation (NERC) report on long-term power supply and reliability trends over the next decade says that we have enough power to meet demand through at least 2025. NERC, the nation's overseer of high power electric grid reliability, also says that with the right measures in place, renewable energy and other resources can maintain and even enhance grid reliability. NERC is concerned, however, with the impact of higher levels of rooftop solar and similar resources on reliability, and is calling for more steps to assess and mitigate those impacts.

Overall, NERC's 2015 Long-Term Reliability Assessment takes a comparatively measured approach in discussing wind, solar, and other drivers of grid transformation. It is a welcome change from NERC's more alarmist voice in other reports in the last year, mostly centered on the Clean Power Plan (two of which are discussed here and here).

There's enough power through 2025 - partly because energy efficiency reduces our supply needs

A primary purpose of NERC's long-term assessment is to answer the fundamental question of whether we will have enough power to meet our energy needs and avoid blackouts. NERC's answer is "Yes." More precisely, NERC states that "all Assessments Areas appear to have sufficient plans for new generation and adequate resources through 2025." In coming to this conclusion, NERC looked at factors such as expected power plant retirements, planned and likely new power plants, and forecasts of future energy demand.

One of the reasons the grid is expected to continue to meet demand is that our overall energy consumption is dropping significantly. The growth rate in demand for power, which once grew by 2 percent or more annually, has fallen to under 1 percent nationwide, as NERC's chart below shows. NERC attributes this partly to the growing impacts of state and federal actions to increase energy efficiency and demand response.

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Image Courtesy of NERC

This might not seem like much, but consider: Our total national power plant capacity is 1,066,486 megawatts (over 1 Terawatt), so each percentage point drop represents thousands of megawatts of now-unnecessary power, and the pollution accompanying much of it. (See table 6.2.A of government's latest Electric Power Monthly for power plant capacity ).

The Clean Power Plan won't crash the grid

Notably, NERC did not raise any serious concerns about the EPA's Clean Power Plan to cut carbon pollution from power plants. In fact, NERC speaks positively about some elements of the final rule, commending EPA's extended compliance dates and its reliability provisions. NERC is continuing to study the Clean Power Plan; its next report will be reliability guidance in early 2016 for the states to use as they develop their Clean Power Plan compliance strategies.

  • Implication - Those opposing the Clean Power Plan have no basis for claiming that it will disrupt grid operations.
Although there are integration issues, rooftop solar and other "distributed energy resources" can benefit the grid

NERC's report devotes considerable ink to addressing the potential grid integration challenges of distributed energy resources such as rooftop solar generation. These customer-sited resources are expanding rapidly across the country, and they could meet 15 to 20 percent or more of total energy demand within the next 10 years. Unlike utility-scale wind and solar farms, they are mostly outside the control of the regional electric system grid operator.

Seeing that growth, one of NERC's highest priorities is to understand and recommend measures to address the potential grid reliability impacts of these resources. (Across the pond in Germany, most rooftop solar installations now provide reliability services, and they are aggregated into larger resource pools and dispatched into the energy market.)

To its credit, NERC's report does recognize that distributed energy resources "present opportunities to create a more reliable and robust system." That is a significant point and is worth repeating as NERC and others take a closer look at these resources.

  • Implication (more of a heads up) - NERC and regional grid operators are looking more closely at the potential reliability and power market impacts of rooftop solar, small wind, electric cars, and other distributed energy resources. As they do so, the grid values of these resources need to be accounted for in addition to grid challenges.
  • Implication - closer coordination between state and federal electricity regulators will help to optimize the grid reliability values of these mostly state-controlled resources

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More natural gas generation could create reliability issues

Another focus of NERC's assessment is the rise of natural gas-fueled generation. For the first time ever, natural gas surpassed coal as the predominant power source in the country, and natural gas is the leading fuel type for new power capacity additions. As this NERC chart shows, new gas capacity (in red) could outpace wind and solar additions in the next several years.

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Image Courtesy of NERC

Adding so much more gas could create fuel supply and market price vulnerabilities, in part because of weak coordination between the natural gas and electricity markets.

  • Implication - avoiding over-dependence on natural gas and its attendant problems, including extraction, will require renewed commitment to adding renewables and efficiency to meet U.S. power needs and cut carbon pollution.
Wind and solar can provide reliable power

In discussing the increasing levels of wind and solar power coming into the grid, NERC took an even-keeled approach. For example, it cited analyses such as the late 2014 Minnesota renewable energy integration study finding that wind and solar power could reliably supply 40 percent of Minnesota's energy needs. Not unreasonably, NERC called on the power industry to continue providing sufficient "essential reliability services" to maintain reliable grid operation. Fortunately, renewable energy already can provide many of these services (see the table at the end of this blog post for details).

  • Implications - consistent and accurate accounting of wind and solar power's capacity value, better technical modeling of grid behavior, and more inter-regional planning coordination among different grid regions all would improve renewable energy integration at high levels across the country.
Renewables integration is already happening

While NERC highlights potential issues that could arise in integrating more renewable energy into the grid, recent achievements show these resources can be effectively added without causing reliability problems:

  • Last month the Colorado utility Xcel achieved a new wind energy record, serving 66.4% of its total customer demand with wind power on November 15. That's the highest amount ever for any U.S. power system. And the high levels weren't just for a few minutes. Between mid-September and mid-November this year, Xcel had 100 hours in which wind served over 50% of its demand.
  • In California, over 400,000 rooftop solar and other distributed energy installations are providing more than 3,000 megawatts of power.

As NERC's assessment suggests, with planning, engineering expertise, and smart policies, transforming the grid can be achieved while maintaining and even enhancing grid reliability.